BSkyB shares have fallen on the news that culture secretary Jeremy Hunt (right) has asked for advice from Ofcom and the OfT on News Corp's bid for the broadcaster. Photograph: Ray Tang / Rex Features

BSkyB shares tumbled again on Monday after News Corporation's bid to take control of the broadcaster was plunged into uncertainty.

In volatile early trading in London, BSkyB shares fell as low as 693p, a fall of more than 7% – wiping another £827m off the value of the company. This brought BSkyB's share price below Rupert Murdoch's original offer price of £7 a share – which had appeared unreasonably low before the phone-hacking scandal struck his News Corp empire.

At 4pm, the shares were changing hands for 710p.

"At £7 per share, the City is telling you that the BSkyB takeover is off," said Louise Cooper, market analyst at BGC Partners. Alex DeGroote, analyst at Panmure Gordon, estimated that there was now only a 10% chance of the deal being successful and dubbed it a "political hot potato".

Shares in News Corporation also fell again on Monday, losing more than 5% in early trading on Wall Street.

This development, which came as the Labour leader, Ed Miliband, pushed for a House of Commons vote on the issue, appears to increase the likelihood of Hunt referring the deal to the Competition Commission.

Bloomberg reported that as many BSkyB shares changed hands in the first 10 minutes of trading as in a normal day. But there were also signs, Cooper said, that some institutional investors were buying up BSkyB shares, often from hedge funds that were bailing out of the company.

City analysts are divided over the correct value of BSkyB. Nomura set its target price for the stock at £10, a price also favoured by Citigroup. Panmure Gordon, though, cut its price target to 690p.

Cooper said some BSkyB shareholders were "starting to panic", following Hunt's decision to turn to Ofcom.

"A lot of hedge funds will be getting out today. Some will be cutting their losses, and others will be breaking even," she suggested.

DeGroote believes that the fundamental value of BSkyB is between 675p and 725p a share – based on its likely profitability. But he also flagged up the "nuclear option" – that News Corp might even be forced to sell its 39% holding.

"We have not really considered the probability of a forced divestiture of News Corp's 39% minority shareholding in BSkyB. However, if the 'fit and proper' test is applied rigidly by Ofcom and events elsewhere worsen, it could become a factor," DeGroote suggested.

Goldman Sachs told its clients that BSkyB shares were now good value, and upgraded its recommendation from "neutral" to "buy".

"We see the 14% decline in BSkyB's share price in the last two days as an attractive entry point … the long-term fundamentals remain strong, in our view," said Goldman in a research note.

"We've put the issue behind us"

Despite the damaging revelation of the last week, which culminated in the closure of the News of the World, Murdoch still enjoys the support of some of his largest shareholders. The Saudi billionaire Prince Alwaleed bin Talal said on Sunday that he had no plans to cut the 7% of News Corp owned by his Kingdom Holding.

"Since the crisis erupted, I have been in touch with them to contain this problem," he told Reuters. "Their decision to shut down this tabloid in England is supported by me because we have to put this issue behind us."

Other News Corp investors have pushed Murdoch not to overpay for BSkyB, arguing that the takeover was not essential.

"This is not a make-or-break deal for us," Jason Subotky, of the fund manager Yacktman, told the Times. "If they do it at the right price, then fine."